Pricewatch | 29 Apr 2021 | Gas Matters Today

Only Subscribers can read the full Article

European gas prices hit a three-month high on Wednesday amid supply concerns following Gazprom’s decision not to bid for interruptible capacity via Ukraine for May.

The front-month NBP contract rallied by 0.4% and the month-ahead TTF contract recorded gains of 0.9%, with both settling at the equivalent of ~USD 7.65/MMBtu – a three-month high.

The rally was pinned on the market digesting Gazprom’s decision not to bid for any interruptible capacity offered by the Ukrainian transmission system operator GTSO in an auction on Tuesday.

Gazprom’s decision is likely to see more LNG arrive into Europe, with the decision by the Russian firm raising concerns over European gas storage levels, which are still being drawn from amid unseasonably cold weather.

The gas price rally helped lift the European carbon price to a fresh record high, with the May-dated contract on the EU ETS settling at EUR 47.69/tonne. The benchmark December 2021 contract settled at EUR 47.79/tonne.

As for JKM, the Asian LNG marker remained at USD 8.6/MMBtu on Wednesday, with the marker having rallied on Tuesday in response to TTF and NBP surging.

In the US, gas benchmark Henry Hub settled at a two-month high, closing at USD 2.93/MMBtu. The price rallied on record gas exports and a marginal decline in production. Unseasonably cold weather has also boosted residential gas demand, with gas storage reportedly being drawn for the first time in April since 2018.

Crude prices continued to rally on Wednesday amid bullish demand-side news. Refining capacity in the US increased to 85.4% last week – the highest level in a year, with US distillate inventories falling by 3.3 million barrels last week.

US crude inventories increased by 90,000 barrels last week to 493.1 million barrels, the US Energy Information Administration (EIA) reported, however the build was much smaller than the 659,000 barrel increase that analysts had expected, according to Reuters.   

The front-month Brent and WTI contracts settled over 1% higher on Wednesday, with Brent settling in the USD 67/barrel range and WTI closing in the USD 63/barrel range.

Front-month futures and indexes at last close with day-on-day changes (click to enlarge):

Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.

Subscription Benefits

Our three titles – LNG Business Review, Gas Matters and Gas Matters Today – tackle the biggest questions on global developments and major industry trends through a mixture of news, profiles and analysis.

LNG Business Review

LNG Business Review seeks to discover new truths about today’s LNG industry. It strives to widen market players’ scope of reference by actively engaging with events, offering new perspectives while challenging existing ones, and never shying away from being a platform for debate.

Gas Matters

Gas Matters digs deep into the stories of today, keeping the challenges of tomorrow in its sights. Weekly features and interviews, informed by unrivalled in-house expertise, offer a fresh perspective on events as well as thoughtful, intelligent analysis that dares to challenge the status quo.

Gas Matters Today

Gas Matters Today cuts through the bluster of online news and views to offer trustworthy, informed perspectives on major events shaping the gas and LNG industries. This daily news service provides unparalleled insight by drawing on the collective knowledge of in-house reporters, specialist contributors and extensive archive to go beyond the headlines, making it essential reading for gas industry professionals.

Did you know that your Internet Explorer Browser is out of date?

Your MS Internet Explorer browser is out of date, and will not be fully compatible with our website. For best browsing experience we recommend that you upgrade your IE browser to a more recent version or use an alternative, more recent browser.